2018 (5) TMI 1000

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....addition of Rs. 39,20,000/- made on account of disallowance u/s 40A(3) by the Assessing Officer. 2. On the facts and circumstances of the case and in law, the order of the Ld. CIT(A)-II, Nashik be cancelled on the above issue and that of the A.O. be restored. 3. The appellant craves leave to add, alter, modify, delete, amend any of the grounds with prior permission of the Ld. Pr. CIT, as per the circumstances of the case. 4. The appellant prays to file any of the additional evidence, with the permission of Ld. Pr. CIT, appropriate to the grounds taken in appeal. 3. The issue raised in the present appeal filed by the Revenue is against deletion of addition made under section 40A(3) of the Act at 39,20,000/-. ....

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....0/- was made before the Sub-Registrar on the date of purchase deed - thus, the cash payments were certainly genuine. The assessee also filed letter dated 12.03.2012, which was duly signed by sellers confirming the fact that they had insisted upon cash payments since they had no faith in the partners of assessee firm. The CIT(A) also considered recorded statements of sellers before the Assessing Officer and held that the contention of sellers could not be accepted when they had confirmed that the impugned letter was duly signed by them. The CIT(A) also noted that the date on the said letter i.e. 12.03.2012 was much later than the date of purchase deed i.e. 10.08.2011. The CIT(A) reversing the order of Assessing Officer deleted the addition m....

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.... rival contentions and perused the record. The issue which arises in the present appeal is against invoking of provisions of section 40A(3) of the Act. Under the said provisions of the Act, it is provided that in case any payment is made otherwise than by cheque or crossed demand draft above Rs. 20,000/-, then such expenditure is not to be allowed in the hands of assessee. The assessee is engaged in the business of builders and developers. During the year under consideration, the assessee had made investment in purchase of agricultural land, which was its business asset. The total consideration of said property was Rs. 99,20,000/-. The assessee had purchased the said property from two co-owners i.e. Dagdu Vitthal Salawi and Badrinarayan Vit....